Being an entrepreneur comes with plenty of perks and benefits, but there are some responsibilities and challenges as well. If you have your own business, you already know that most of your time and focus goes toward sales and marketing. Building a recognizable brand consumes a lot of time, and many business owners forget to pay enough attention to the legal side of operating a business. Give your best to avoid this type of oversight, and get well informed about most common legal mistakes new entrepreneurs make.
Not hiring a lawyer
There is a popular belief amongst solopreneurs and partnerships, and it is a bad one. Namely, they think their businesses don’t have the same legal responsibilities that large companies have. They also think that legal issues can’t emerge before you grow the business, so they avoid hiring an attorney. The experience showed that this practice can be very harmful to the company, and it will most certainly destroy your budget. Because of that, it is highly recommended to hire a lawyer before you launch, so he/she can set the things up from the start.
Not setting up good company structure
There are various types of business structures. Once you decided to start a business, you may choose between LLC, sole proprietorship, partnership, S corporation, and corporation. Go ahead and learn about all those types and choose the right one. It is very important to understand benefits and downsides of each one, so you could make the best choice. Let’s say you set your company to be recognized as a sole proprietor. The law will consider you and your business as one, and in case of a lawsuit, all your personal assets can be at risk.
Not having terms and conditions policies Once you enter some company website, especially those that provide clients with some sort of service, you will usually stumble upon a „Terms and Conditions“ agreement. This document contains all descriptions about the use of the product or service, and there are also customer’s obligations while using it. In case your customer isn’t happy with your service, they can sue you, and not having a clear terms and conditions policy, with a visible checkbox, can cost you a lot of money. In some cases, the whole business may be in jeopardy because of this oversight.
Not having proper documentation on workers
It is very important to have a separate file for every employee you hire. In addition, you will need to set up good workers’ compensation system and Withstand Lawyers in Sydney is a perfect example lawyers who can help you with that. If you try to conduct business without needed documentation on employees, you may lose your business over a lawsuit, and there is a possibility to be arrested as well.
Not having nondisclosure and non-compete agreements
It is crucial to protect anything that is proprietary about your business. Whether it’s customer list or special formula, all of your employees must be legally bound by these agreements. You should give your best to protect your business from everybody who has access to confident and proprietary information. These agreements are unavoidable in the food industry, especially in big companies, such as Kentucky Fried Chicken. Every employee that has access to the recipe must sign the agreement that they will never reveal it.
Not getting patents, copyrights, and trademarks
Before you launch and start selling, it very important to protect your intellectual property by applying for a patent. If you miss to copyright and trademark your product or service, anyone can copy it and start making money on your ideas. That money is what you lose if you forget to protect your stuff. The most vulnerable companies these days are most certainly technology companies. If your business is one of those, make sure to get well informed about the law. This knowledge will help you to protect your ideas, and therefore, your company.
The oversights described above are just the most common ones. There are plenty more, and some of them can really harm your small business. Don’t hesitate and start learning the law in order to avoid unpleasant situations in the future. You should be thinking about growth, sales and marketing, so make sure you take care of legal issues first. If that is not part of your expertise, feel free to seek professional help. Go ahead and start working on your next marketing campaign, but just in case you took care of legal stuff.